Prime Minister Shinzo Abe suggested Thursday he will carefully study economic indicators for the July-September period to make a final judgment on whether to raise Japan’s consumption tax rate to 10 percent in October 2015 as scheduled.
Abe’s remark came after data showed that the world’s third-biggest economy plunged an annualized real 7.1 percent during the April-June period. He is expected to decide on the matter soon, possibly in early December.
“The point is whether we can confirm that the economy is returning to a growth path” in the third quarter of 2014 following the 3-percentage-point tax hike to 8 percent from April 1, Abe said in a radio program.
“We should prevent the economy from stalling and falling into negative growth,” Abe also said from the standpoint of promoting his economic policies, dubbed “Abenomics,” which are aimed at beating nearly two decades of deflation.
In the April-June period, the Japanese economy suffered its worst setback since the first quarter of 2009, when its gross domestic product plummeted an annualized 15.0 percent in the wake of the economic downturn triggered by the 2008 global financial crisis.
Some experts project that the country’s economy will only climb 2 percent at the maximum in the three months through September, with the adverse effects of the first round of the two-stage sales tax increase lingering.